Russia economy on the brink as main revenue source plunges

Russia’s oil and gas revenues have dropped sharply as President Vladimir Putin continues to pour massive funds into the war effort.

The country is currently grappling with record-high inflation and an interest rate of 21%, putting intense pressure on businesses that rely on bank loans and raising the risk of widespread bankruptcies.

Despite mounting pressure from the Kremlin, Russia’s central bank has refused to lower interest rates.

Russian consumers are also feeling the squeeze, with prices surging on basic food staples like butter, potatoes, and onions.

In April alone, Russia lost an estimated $13 billion in oil and gas export revenues.

At the same time, the Kremlin increased its defense budget by 25% for the year, underscoring its commitment to military spending despite a deteriorating economic outlook.

With revenue shrinking, Russia is now considering lowering its benchmark oil price from $60 to $50 per barrel. Meanwhile, Saudi Arabia — a key member of OPEC+ — announced it would increase production in June, a move that could further drive prices down.

(QG - Source: The Daily Express — Picture : © Unsplash)